Alistair Darling: On 20 July 2006, Official Report, column 51WS I informed the House that the Government would actively consider a sale of part of its interest in British Energy (BE) via a capital markets transaction. This interest is held by the Nuclear Liabilities Fund (NLF). On 30 May I announced that the Government intended to direct the NLF to sell part of its interest in BE through an equity capital markets transaction and that, further to this, the sale process completed at 4.30 pm on 31 May. A total of 450 million shares have been sold through an accelerated book built offering at a price of 520p per share, raising gross proceeds of approximately £2.34 billion. This includes the exercise of an over-allotment option that has resulted in the sale of 50 million shares.
	The NLF is a segregated fund set up at the time of BE's privatisation in 1996 to meet the eventual decommissioning costs of the company's eight existing nuclear power stations. In 2002, when BE was facing an uncertain future and was seeking funding so that it could continue to meet its obligations, the Government stepped in to support a restructuring of the company in order to ensure the safety of nuclear power and the security of electricity supplies. As part of the restructuring, which came into effect in 2005, the NLF was given £275 million in company bonds and the contractual right to receive a proportion of the company's annual adjusted free cash flow. The NLF has the right to convert all or part of this 'cash sweep' into shares in BE which can then be sold on to a third party.
	It has been the Government's objective, through this sale, to diversify the NLF's assets, of which 87 per cent. had been linked to BE, and therefore reduce the level of risk in its investment. All net proceeds from the sale will go to the NLF, helping to ensure that it is better placed to meet its obligations in relation to the eventual decommissioning costs of BE's nuclear power stations.
	The NLF will convert its contractual entitlement to part of the cash sweep in proportion to the number of shares sold. The effect of the disposal will be to reduce the NLF's economic interest in BE by way of the cash sweep from approximately 64 per cent. to approximately 36 per cent. (including the over-allotment option). The Government will not direct the NLF to make any further sale of its interest in BE for a period of 90 days from the closing date of the offering. The Government do not intend to direct the NLF to reduce their economic interest in BE by way of the cash sweep to below a strategic interest of 29.9 per cent.
	The Government and the NLF have appointed Lazard as independent financial advisers, and Citigroup Global Markets UK. Equity Ltd., Deutsche Bank AG and Merrill Lynch International to act as joint book-runners in relation to the transaction.